Key highlights:
- Thailand’s GDP growth slowed to 1.9% in 2023 due to weak exports. However, the continuous increase in tourism and private consumption is expected to drive GDP growth, which is forecasted to grow at a CAGR of ~3.3% between 2023-2027, reaching ~USD 620.8 billion by 2027.
- Thailand’s digital economy’s contribution to its GDP was estimated to be around USD 36 billion (THB 1.1 trillion) in 2023. Its proportion to the GDP is estimated to be ~6.9% in 2023 and is forecasted to reach ~11.2% by 2027.
- The telecommunications landscape in Thailand has undergone a significant transformation since 2020, owing to mergers and acquisitions. In 2021, the merger of state-owned telcos CAT Telecom and TOT Plc resulted in the formation of National Telecom (NT). True Corporation (True Corp) was formed in February 2023, post the merger of TrueMove and DTAC. Additionally, AIS acquired 3BB and a 19.0% stake in Jasmine Broadband Internet Infrastructure Fund in Nov-2023.
- To gain market share in Thailand’s fixed broadband space, telcos are focusing on four key strategies: expanding fibre optic infrastructure, introducing high-speed broadband plans, bundling attractive content offerings, and offering competitive pricing. As a result, the fixed broadband subscriber base expected to grow at a CAGR of 6.8% over 2023-2027 to reach 19.1 million.
- Due to intense competition, the overall average ARPU in the fixed broadband segment declined to approximately USD 12.5 (THB 447.9) in 2022 from USD 13.7 (THB 488.4) in 2021. However, the ARPU is expected to continue decreasing, though at a slower pace due to the increasing demand for high-speed packages and bundled services.
- The overall increase in subscribers will offset the ARPU stagnation, leading to fixed broadband revenue expanding at a CAGR of 5.8% between 2023-2027, reaching USD 2.7 billion (THB 97.9 billion) by 2027.
- Thailand’s fixed broadband market is dominated by few major players like AIS, True Online, 3BB and TOT, with AIS and True Online together accounting for ~45% of the overall fixed broadband revenue in 2022.
- In November 2023, the strategic acquisition of 3BB and Jasmine Broadband Internet Infrastructure Fund, enabled AIS to emerge as the largest fixed broadband player in Thailand with ~4.7 million subscribers in Q3-2023, displacing True Corp, which has 3.8 million fixed broadband subscribers.
Macroeconomic overview
Thailand has a diverse and mixed economy that balances its strengths in agriculture and industry, thanks to tourism and private consumption. Its population of 70.2 million contributed to a GDP growth rate of 1.9% in 2023. The GDP is expected to grow further at an average CAGR of ~3.3% between 2023-2027, reaching ~USD 620.8 billion by 2027.
Exhibit 1: Thailand macro-economic indicators
Thailand has also been one of the fastest-growing digital economies in the region for the past two years. According to the Portulans Institute’s 2022 Network Readiness Index, Thailand was ranked 46th out of 131 economies globally and 3rd in the ASEAN region. The proportions between the digital economy value and the GDP is estimated to be ~6.9% in 2023 and is expected to reach around 11.2% by 2027.
Exhibit 2: Network Readiness Index (NRI) 2022- ASEAN countries
This push towards digitalization is further incentivized through the Thailand 5G Alliance. This initiative aims to promote the use of industrial 5G applications in public health, security, education, and other sectors. In line with this, the Prime Minister of Thailand also urged government agencies to enhance the implementation of the National AI Strategy and Action Plan (2022-2027).
Industry snapshot
A. Telecom market size and growth
Thailand’s telecommunications market has experienced robust growth in recent years. This growth is driven by surging demand for connectivity, including 5G and fixed broadband, alongside widespread adoption of digital technologies. The sector boasts a mature landscape with a diverse mix of public and private players. The growth trajectory is expected to continue, propelled by the imminent arrival of 5G technology, successful spectrum auctions, and ongoing network upgrades by major telecommunications providers.
Exhibit 3: Thailand telecom revenue forecast, 2021-2027F
Anticipated to undergo modest growth, the telecommunications market is projected to achieve USD 16.5 billion (~THB 590.9 billion) by 2027, growing at a CAGR of 3.4% over 2023-27.
Exhibit 4: Revenue of key telecom segments in Thailand, 2022 and 2027F
While mobility segment remains the largest revenue contributor for Thai telecom operators, the primary drivers of future growth will shift towards fixed broadband and the enterprise segment.
Fixed broadband subscriptions is expected to grow at a CAGR of 6.8% from 2023 to 2027. This will result in an overall fixed broadband revenue CAGR of 5.8% during the same period. This growth can be attributed to the aggressive network expansion plans by telecom companies and their attractive discounted and low-tier offerings to acquire new subscribers.
Thai telecommunications companies are placing increased emphasis on improving their capabilities to support mid-range and high-end devices. They are also investing in digital infrastructure that can accommodate high-speed data services and cloud solutions. Furthermore, the government and private sector are working together to establish Thailand as a hub for data centres, which will drive overall revenue growth. Notable developments that exemplify this trend include Amazon’s construction of a data centre to support its Asia Pacific hyperscale infrastructure and the launch of Telehouse’s datacentre facility in 2023.
B. Competitive landscape
The telecommunications industry in Thailand has undergone significant changes since 2020. In 2021, state-owned telcos CAT Telecom and TOT Plc merged to form National Telecom (NT). In 2022, True Corporation (True Corp) was created through the merger of TrueMove, which was second in terms of revenue in 2021, and DTAC, which was third in terms of revenue. This merger was finalized in March 2023 with the approval of the National Broadband and Telecommunications Commission (NBTC). The consolidation has significantly altered the competitive landscape, resulting in True Corp now occupying the top spot in 2022, overtaking the once-dominant AIS. True Corp plans to take advantage of the combined strengths of True’s well-established broadband internet, pay-TV, and digital services expertise, as well as DTAC’s existing digital capabilities, to maintain its leadership position. However, in compliance with an NBTC condition for the merger, True and DTAC will maintain their distinct brands for at least three years, allowing for a smoother transition and market adaptation.
Exhibit 5: Revenue market share of leading telcos in Thailand, 2021 and 2022
The overall revenue of the telecom market decreased by 3.0% YoY in 2022, primarily due to a decline in the revenue of True Corp and Thaicom between 2021-22. The top three telcos collectively held approximately 98% of the market’s revenue share in 2022. Other significant players in the telecom services sector include Thaicom, Triple T Broadband (3BB), Ada Digital, and SUPERNAP Thailand. The merged entity True Corp held the highest revenue share of 43.1% in 2022, surpassing AIS, which was the market leader until 2021.
Fixed broadband market in Thailand
A. Fixed broadband revenue and subscription forecast, 2021-2027F
The fixed broadband market in Thailand is expected to experience strong growth in 2023 and with total number of subscribers estimated to have reached ~14.7 million, which is an increase of 8.1% from 2022.
The demand for broadband internet access has been fuelled by the “new normal” post-pandemic reality and the ongoing trend of digitalization. This demand is coming from both consumers and enterprises.
Looking ahead, the fixed broadband market is expected to continue its robust growth trajectory, driven by the sustained momentum of the digital shift and its ever-increasing demands for reliable connectivity.
Fibre-optic network expansion, high-speed offerings, attractive content bundles, and competitive pricing are the primary battlegrounds in the Thai fixed broadband market. Thai telcos are employing a multi-pronged approach, leveraging these elements alongside targeted marketing and innovative solutions to attract new subscribers and boost revenue.
To capitalize on this opportunity, in November 2023, AIS strategically acquired 3BB for USD 546.0 million and a 19.0% stake in Jasmine Broadband Internet Infrastructure Fund for USD 361.2 million. The acquisition enables AIS to strengthen its fibre-optic internet services and offer consumer access to a broader and better quality of service by improving broadband inclusion in new areas. Additionally, it facilitated AIS to strengthen its competitive positioning against True Corp (formed by merger of TrueMove and DTAC). As a result of these acquisitions, AIS emerged as the biggest fixed broadband player in Thailand with ~4.7 million subscribers in Q3-2023, displacing True Corp, which has 3.8 million fixed broadband subscribers.
Exhibit 6: Thailand fixed broadband revenue and subscription forecast, 2021-2027F
Intense competition has led to aggressive pricing strategies and diverse service packages offering. The telcos are tapping growing demand for affordable connectivity with competitively priced basic broadband packages. These offerings attract first-time users and budget-conscious consumers, expanding the subscriber base. Further incentivizing subscriptions, introductory discounts and bundled packages with free devices or TV channels, is driving short-term subscriber growth.
Exhibit 7: Thailand fixed broadband ARPU forecast, 2021-2027F
While this strategy has resulted in the average ARPU declining from USD 13.7 (~THB 488.4) in 2021 to ~USD 12.5(THB 447.9) in 2022. As a result of increasing adoption of 5G, the ARPU is expected to decline further, albeit at a lower rate and is estimated to reach ~USD 12 (THB 427.5). However, overall rise in subscribers translates to a projected growth rate (CAGR) of 5.8% for fixed broadband revenue during 2023-2027 to reach USD 2.7 billion (THB 97.9 billion).
B. Competitive landscape
Thailand’s fixed broadband market is dominated by few major players like AIS, True Corp (True Online), 3BB and TOT. The leading providers True Online and AIS together accounted for ~45% of the overall fixed broadband revenue in 2022.
Thailand’s fixed broadband revenue declined marginally by 1.8% over 2021-2022 to ~USD 2 billion (THB 72.9 billion), owing to intense competition. ARPU declined throughout the industry, as the telcos offered discounts and low-tier price plans to gain market share, especially in the newly extended service areas.
Exhibit 8: Fixed broadband revenue share of leading telcos in Thailand, 2021 and 2022
The two leading providers True Online and AIS witnessed a decline in the overall ARPU in 2022. ARPU for True Online declined from ~USD 14.6 (THB 522) to ~USD 13.2 (THB 470), whereas AIS ARPU declined from ~USD 12.7 (THB 455) to ~USD 11.9 (THB 426) during the same period.
Total fixed broadband subscribers is estimated to have increased by 8.1% over 2022-2023 to reach ~14.7 million. Major players are aggressively expanding their FTTH networks, aiming for wider coverage and increased market share. Telcos are emphasizing on developing products, services and innovations to benefit customers. Government initiatives like the Digital Thailand 2027 plan are also pushing for nationwide fibre optic infrastructure development.
Exhibit 9: Fixed broadband subscriber share of leading telcos in Thailand, 2021 and 2022
The growing demand for reliable and high-bandwidth internet connections is propelled by the rising popularity of digital content and online businesses. AIS, having entered the fixed broadband market with AIS Fibre in 2015, has expanded its reach to 77 cities, covering 8.8 million households. Leveraging its strength in FTTH technology, AIS Fibre has penetrated the market effectively. In February 2023, further collaborations with Huawei (“1Gbps Every Room”), Netflix and HBO solidified its position. Consequently, AIS’s fixed broadband subscriber base grew from ~1.8 million in 2021 to ~2.2 million in 2022.
True also responded to customer needs by introducing targeted campaigns. True Gigatex PRO Life bundled fibre broadband with a modem, smart IoT features (CCTV cloud), and content-rich True Unlock TV. True Gigatex Flexi PRO offered flexible speed adjustments catering to diverse lifestyles, including online work/learning, entertainment, and gaming. Additionally, a partnership with Disney+ strengthened the digital content offerings. As a result, True’s fixed broadband subscriber base increased from ~4.6 million in 2021 to ~5 million in 2022.
Conclusion
Overall, Thailand’s fixed broadband market is experiencing robust growth and has significant potential for future expansion. However, addressing infrastructure gaps, managing competition effectively, and adapting to evolving technologies will be crucial for sustained success.